The private equity player has raised Rs 2,800 crore so far for investing in real estate, of which over Rs 1,200 crore has been raised and deployed in commercial real estate across the country in a joint venture with IL&FS Investment Managers.Kailash Babar | ET Bureau | Updated: August 04, 2015, 11:09 IST

MUMBAI: Real estate-focused private equity fund Milestone Capital is planning to raise Rs 500 crore-Rs 800 crore through a commercial property fund in the next six months, said a top company official. The private equity player has so far raised Rs 2,800 crore for investing in real estate, of which over Rs 1,200 crore has been raised and deployed in commercial real estate across the country in joint venture with IL&FS Investment Managers.

"We are confident that our expansion in commercial fund business will be well supported by investors, given our performance so far. We have divested 25 projects in the last three years and have returned close to 100% of entire real estate portfolio, probably the first by any domestic private equity real estate fund platform," Rubi Arya, executive vice chairman, Milestone Capital Advisors, told ET. "Apart from consistently distributing returns to our investors through regular exits across our funds, we have also been steadily making investments."

Recently, Milestone Real Estate Fund exited from its investment in Vikhroli Corporate Park Private Ltd that owned 247 Park commercial complex at Vikhroli suburb of Mumbai. Both joint owners HCC and Milestone Capital sold the asset to Blackstone Group for Rs 1,050 crore. This was the largest exit done by a private equity fund in commercial property market in India.

Milestone has returned close to Rs 1,600 crore back to investors across its 7 real estate funds In the past 18 months. Milestone's strategy to focus on structured debt in line with the property market scenario has helped in realizing exits averaging above 20% in the last three funds launched since 2010; and 23% in its residential fund, MDS III.

After returning capital of around Rs 3,000 crore back to investors, the fund is currently raising its 10th fund, the Milestone Opportunities Fund 10, a senior secured debt fund with upside appreciation. Of the targeted fund size of Rs 500 crore, Milestone has received commitments worth Rs 120 crore so far. Through this fund, Milestone will be investing alongside existing development partners in residential projects in the top 5 metros, in projects with low leverage, minimal exit risk and a 2-3 year time frame.

In the last three months, the fund also exited from another commercial asset Millennium Tower II in Kolkata for over Rs 90 crore, while concluded investments worth Rs 90 crore in two residential projects in south India, Landmark Torrence in Chennai and Pelican in Pondicherry through its structured debt fund, Milestone Domestic Scheme III.